It's Stagecoach v Connex on misery lines

Stagecoach, the rapidly expanding train and bus operator, is to confront the French run company, Connex, in a battle for control of south-central rail routes covering Sussex, Surrey and parts of Hampshire - a franchise which generates some of the greatest passenger dissatisfaction in the country.

The shadow Strategic Rail Authority announced yesterday that Stagecoach had prequalified for the initial phase of franchise replacement when the first batch comes up for renewal in 2002.

If Stagecoach wrested the franchise from Connex, owned by Vivendi SA, the group which owns water and waste disposal facilities, it would begin to change the railway map yet again. Stagecoach already operates South West Trains, an adjoining London commuter franchise, and would then control much of the south coast from Sussex to Devon.

The issue could become a matter for the monopolies and mergers commission if Stagecoach, looked like becoming too dominant a force in the industry. Apart from South West Trains, it already has a 49% share in the west coast main line with Virgin.

Mike Grant, the SRA's chief executive, confirmed that Virgin and Stagecoach have also prequalified for the first phase of renewal for the east coast main line franchise between London and Edinburgh.

At the moment the line is run by Great North-Eastern Railway, a subsidiary of the Sea Containers transport group.

The Virgin move on the east coast line prompted surprise in the industry when it was first revealed several weeks ago. Mr Grant said that to progress to the next stage of bidding, both Virgin and Stagecoach would have to satisfy him that they had the resources to manage the additional finance.

He wants to be sure that they can deliver the resources to manage both the west coast and east coast main line franchises, "and that it is in the in terests of passengers that the two big London to Scotland franchises should be in the hands of a single franchisee.

Last week, official figures disclosed that Virgin's two companies had the worst punctuality record for the 12 month period to mid-October 1999. Virgin's Cross Country trains did, however, rise from category E to category D in the performance tables published by the SSRA.